Retail, Hospitality, Food Industries Top the List as Lagos Records N6.3 Trillion in PoS Transactions in 2024

By Emmanuel Kwada

The Nigerian economy has witnessed a significant surge in Point of Sales (PoS) transactions in 2024, with the total value of transactions reaching an all-time high of N18 trillion. This represents a 69% increase compared to the N10.7 trillion recorded in 2023. The data, obtained from the Nigeria Inter-Bank Settlement System (NIBSS), highlights the growing adoption of digital payment systems in Nigeria.

Photo credit: Techpoint Africa.
PoS agent attending to a customer.

The volume of transactions also rose by 8% year-on-year to 1.5 billion in 2024, compared to the 1.4 billion recorded in the previous year. The average transaction value was N12,000, indicating a significant increase in the value of transactions being carried out through PoS terminals.

Lagos State recorded the highest PoS transaction value of N6.3 trillion, followed by Abuja with N2.5 trillion, Rivers with N1.8 trillion, Kano with N1.2 trillion, and Oyo with N1.1 trillion. These states are major commercial hubs in Nigeria, and the high volume of PoS transactions in these areas is a testament to the growing demand for digital payment solutions.

Lack of cash in ATMs and the need for alternative payment methods have driven the adoption of PoS terminals

The top 5 industries by PoS transaction value were Retail with N8.5 trillion, Hospitality with N2.8 trillion, Food and Beverage with N2.2 trillion, Entertainment with N1.5 trillion, and Healthcare with N1.2 trillion. These industries are key drivers of the Nigerian economy, and the high volume of PoS transactions in these sectors indicates a significant shift towards digital payments.

The significant increase in PoS transactions in 2024 can be attributed to the growing adoption of digital payment systems in Nigeria. The rise of fintech companies and the expansion of PoS terminals across the country have made it easier for individuals and businesses to make transactions. Additionally, the COVID-19 pandemic has accelerated the shift towards digital payments, as people increasingly prefer contactless transactions.

PoS Machine.
Photo credit: Techpoint Africa

PoS terminal deployment jumped by 129% in 2024, with the number of deployed terminals increasing from 2.4 million in 2023 to 5.5 million in 2024. Registered PoS terminals also increased from 3.5 million in December 2023 to 7.8 million in December 2024. This significant increase in PoS terminal deployment is a testament to the growing demand for digital payment solutions in Nigeria.

Industry analysts believe that the difficulty in accessing cash through traditional banking channels has contributed to the growth of PoS transactions. The lack of cash in ATMs and the need for alternative payment methods have driven the adoption of PoS terminals. Fintech companies such as PalmPay, Moniepoint, and OPay have played a significant role in deploying PoS terminals across the country. These companies have onboarded thousands of agents and are investing in deploying more PoS terminals to drive financial inclusion.

I bought the cash, and I can’t withdraw N10,000 for N200 like before

The growing PoS transactions have also boosted revenue for the government through the Electronic Money Transfer Levy (EMTL) charged on transactions from N10,000 and above. This levy has generated significant revenue for the government, and the increasing volume of PoS transactions is expected to further boost government revenue.

However, the high charges imposed by PoS operators have become a concern for many Nigerians.

“I bought the cash, and I can’t withdraw N10,000 for N200 like before; I have to add something on top,” said Favour Ojokwu, a PoS vendor in Nyanya, Abuja. “In fact, we normally charge N100 for N5,000, but since they hiked it to N500 during the Christmas period, it still hasn’t come down. Some are even collecting N300,” she added.

The value recorded in 2024 represents a 79.6% increase over the N600 trillion recorded in 2023

A Lagos resident, Igila, told THE INSIGHT on phone, “There was no cash during the Christmas period, but now we still pay N100 to N200 for N5,000 here in Lagos.”

Fatima Yakubu, a resident of Katsina, said, “The problem was in the city here in GRA, and that was during Christmas, but now every charge has gone back to normal. However, there was never a surge in the villages because they deal with cash mostly.”

Mr. Daniel Steven, another resident from Adamawa, noted, “The issue was mainly in the city, and it was during the Christmas period, but now everything has gone back to normal.”

The charges, which can be as high as N300 for a withdrawal of N5,000, have been attributed to the cost of getting cash, as operators are also unable to withdraw cash from banks for the business. This has led to calls for regulatory intervention to address the issue of high charges and ensure that PoS transactions are carried out at a reasonable cost.

The NIBSS Instant Payment (NIP) data shows that the value recorded in 2024 represents a 79.6% increase over the N600 trillion recorded in 2023. The NIP is an account-number-based, online real-time Inter-Bank payment solution developed in 2011 by NIBSS. It is the Nigerian financial industry’s preferred funds transfer platform that guarantees instant value to the beneficiary.

In conclusion, the significant increase in PoS transactions in 2024 is a testament to the growing adoption of digital payment systems in Nigeria. The rise of fintech companies and the expansion of PoS terminals across the country have made it easier for individuals and businesses to make transactions. However, the issue of high charges imposed by PoS operators needs to be addressed to ensure that PoS transactions are carried out at a reasonable cost. Regulatory intervention and increased competition in the PoS market are expected to drive down costs and increase the adoption of digital payment solutions in Nigeria.

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